Monday, 30 January 2012

CEO Pay: Houston (Toronto, London), we have a problem

People may have noticed the rich pay for CEOs in 2010 reported in Canada's CEO Elite 100 and dismissed it as the usual envious chatter emanating from a left-leaning policy institute. From my perspective as an investor with holdings in all these companies, direct or indirect (we pretty well all do through our pension savings, ETFs, mutual funds etc) I think they have a point.

An epidemic of overpaid CEOs
The plain fact is that CEOs earn too much. All the pay-for-performance, maybe-they-earned-it arguments fall by the wayside when one realizes that CEO pay has been rising much faster than employee wages in those companies. The pre-amble to the CEO report says the average CEO collected 189 times the average Canadian wage in 2010, up from 105 times in 1998. Have we entered a golden age of company profits and investor returns? Have CEOs been responsible for all good things in industry such that they merit the lion's share of any gains?

A long-developing epidemic across industries and major countries
It's not just the current whipping boys in the banks and the financial industry either. The phenomenon cuts across all industries. It's not just Canada either. The same meteoric CEO pay increase has been happening in the USA (e.g. see this recent academic paper by Jerry Kim, Bruce Kogut and Jae-Suk Yang on SSRN which refers to many studies on the topic, or Meritocracy vs Plutocracy on The Big Picture blog) and in the UK (see Pay and Performance: creating a fairer share of rewards) where it is such an issue that Prime Minister Cameron is promising to legislate shareholder votes on CEO pay that bind the corporation.

The research papers document that the epidemic began around 1980 and really took off during the Internet boom. The Kim et all paper maintains that though the Internet stock price bubble popped, it did not pop on pay. Instead the bubble caused a lasting upward shift in the norm for CEO pay expectations.

Update March 27 - Two other papers reinforce the idea that a problem exists by showing a longer historical perspective and pinning down wages as the main culprit. Note how the top income earners are getting a bigger share since around 1980 in TOP INCOMES IN THE UNITED STATES AND CANADA OVER THE TWENTIETH CENTURY by Emmanuel Saez:

Note also how wages is the main driver of this trend in this chart:

The Rise of Canada's Richest 1% by Armine Yalnizyan of the Canadian Centre for Policy Alternatives has this chart that shows the trend continuing unabated up to 2007. Table 2 in the paper also confirms that wages are the main component of top earner incomes.

CEOs acting like children and playing leapfrog
Every parent will recognize the basic mechanism by which CEO pay goes up. If one child gets something then the other expects the same thing. Peer comparison is the most important factor by far in establishing the pay level for a CEO. Despite all the complicated schemes (read the details for any public company in its annual Management Information Circular which is available on Sedar - click on Search Database then Search for Public Company documents - for every Canadian TSX listed company), they all boil down to more or less what similar companies pay. Apart from the academic studies that confirm the fact, the telling and remarkable result of these complex compensation plans is that somehow, year after year, whatever company financial results or stock performance, CEO pay almost always rises, often in huge upward leaps, and almost never goes down.

A paper by Thomas DiPrete, Greg Eirich and Matthew Pittinsky says that the few CEOs who manage to leapfrog each year to the upper end of the pay scale pulls every else along in a chain reaction. A governance failure in one firm propagates through all companies.

CEO Myths - motivation, retention and talent
It is astounding that CEO performance motivation is constantly invoked as a primary justification for high pay and big bonuses. Hey, I went to business school too where I learned that Maslow and Herzberg long ago determined that pay is not a performance motivator. At best it is a potential dis-satisfier.

There is evidence from Harvard Law School that high CEO pay harms a company - "Corporate Pay Slice [CPS = CEO's percent take out of the top five execs] is negatively associated with firm value" - in CEO Pay Slice by Lucian Bebchuk, Martijn Cremers and Urs Peyer.

Another oft-cited reason is that should the big pay not be granted, the CEO will leave and perhaps the Board will resign too. Fine, let's call their bluff, let 'em resign. In the UK, Easyjet founder and major shareholder Sir Stelios Haji-Ioannou denounced fatcat bonuses proposed by the Board, noting that the Board and executives could be easily replaced. One of the things you quickly learn in the corporate world is that life goes on without you, you can quickly be replaced and forgotten.

There are plenty of competent people around. The plain fact is that almost all of the so-called corporate superstars are nothing of the sort. Most are managers, keeping things going that others have created with improvements at the margin. Very few make orders of magnitude positive difference. Many destroy a lot more value than they create.

How many real business superstars are there? Think of the difference between the ultimate results of true superstar Steve Jobs and former Apple CEO John Sculley (isn't it interesting that Sculley was the highest paid executive in Silicon Valley in 1987). A corporation is a team and the CEO may have an important role as the captain but without the rest of the players, he or she won't succeed. The CEO Forum has a good discussion of the matter in Is talent overrated? (the answer is yes it is).

CEOs get their real reward from the feeling of power, of being the top guy. Pay only matters to the extent that it is close enough to peers.

Set the ball rolling in the other direction.
A few days ago, Royal Bank of Scotland CEO Stephen Hester turned down a bonus of £963,000 (it is interesting in itself how many news reports talked of a £1 million figure, as if the difference is inconsequential; I daresay most taxpayers would be overjoyed to receive that £37,000 in small change, which was treated as a rounding error) just after the RBS Board Chairman Philip Hampton had himself decided to forego his £1.4 million bonus. The fact that the RBS came to be majority owned by the British taxpayer during the credit crunch gave politicians the leverage to cause the bonus refusal.

But hey! Now we have a new peer reference point for Canadian banks to apply the peer reference method so cherished by compensation schemes! Hester's salary is £1.2 million, or about $1.9 million. The CEO of Canada's own Royal Bank, Gordon Nixon, pulled down $11.8 million in 2010 according to the CEO Elite report. Hmm, that looks to be about $9.9 million too much. Since RBS is actually more than twice the size of RBC - £1522 billion (CAD$2395 billion) in 2010 assets vs $718 billion - Nixon should get about half what Hester gets, shouldn't he? Yet, even including the refused bonus Nixon made almost four times as much as Hester.

Another peer benchmark possibility, since most of these CEOs are not much more than bureaucrats - indeed it is debatable whether a CEO's job is tougher than a senior civil servant who has to contend with public politics not just the corporate variety - would be to benchmark CEO pay against the civil service. The feds pay a maximum of $360,600 in the top GCQ-10 scale and $513,000 at the top of the crown corp scale.

What's comparable anyway? "Long time ago, a CEO explained to me the only difference between big business and small business was the number of 0s after the number" from FrontOfficeBox.

Compromise CEO pay proposal
Let's set the maximum ratio of total CEO compensation to a firm's median employee pay at 40 times (e.g. if median employee is paid $40,000, CEO gets at max $1.6 million) which was more or less the situation around 1980 when things started down the wrong path. Let Boards figure out whatever arcane method they wish to arrive at that result. 40x is very generous, as the CEO earns in one year what it takes the employee 40 years, almost a whole working career, to earn.

Putting fatso CEOs on a money diet
Many of the mainstream proposed solutions to reign in CEO pay involve improving corporate governance. These include: limiting poison pills, eliminating golden parachutes, stopping so-called shareholder rights plans that entrench management, enhancing board independence etc. But governance has been improving in the last decade at least, while CEO pay has continued to rise disproportionately, so it's doubtful that will have a big effect.

Perhaps "say-on-pay", especially if it is mandated by legislation, would have some effect. Since Canadian governments have said not a peep even about advisory say-on-pay, I'm not holding my breath.

The most effective mechanisms would affect what I think is the root cause of this long-lived bad trend. A culture change is required. Corporate Board and executive thinking needs to change.

Hit 'em in the ego where it matters. Praise the good guys for reasonable pay, dump on the greedy, make reasonable pay a morality issue, practise social ostracism - something like the drinking and driving campaigns that transformed attitudes and behaviour. A good example of that kind of expression of disapproval is the stripping of the knighthood granted to the man whose actions as RBS' boss almost sank the bank, Fred Goodwin. Apparently he cannot find a new job. Good, Goodwin's kind of "talent" isn't really needed by the world of business. The hysterical reaction of the British business community indicates the arrow of scorn has hit its mark.

Canada could stop awarding honours like the recent the Order of Canada to people such as Calvin Stiller, notorious as founder of the horrible money sinkhole investment fund, the labour-sponsored Canadian Medical Discoveries Fund. To add insult to the financial injury to investors, the Order cites his "his leadership as a medical entrepreneur"! Check out the Morningstar price chart for CMDF, see what people on Financial Webring think of it, a sentiment with which I totally agree since I lost 80% on my own investment in CMDF). Perhaps Stiller is an outstanding doctor but a successful entrepreneur he ain't.

Canadian CEOs bloated from eating too much shareholder lunch
On my other blog recently, I posted my choice of the worst CEO pay offenders, like Marc Tellier of Yellow Media and Frank Stronach of Magna International.

To keep the proper positive outlook for the future, next post will cover some of the few Canadian companies that I think are closest to being on the right pay track.

Friday, 27 January 2012

Risk-Efficient Indices - Evidence from Live Results

One of the biggest problems with any financial research is that patterns and strategies that worked in the past may not work in the future. The folks at the EDHEC Research Institute who created supposedly "new, improved" Risk-Efficient Indices about which I wrote a year ago, have now come out with data in the Live Results article that tests their theory. It uses actual results from the last two years, data that comes from the time after the new index method was worked out and thus could not merely be suited to the method simply because it was part of the data set used to create it.

The "new, improved" indices are put up against the traditional cap-weighted index method which is taken as the benchmark or representation for all major markets like the S&P 500, the TSX 60 or Composite, the FTSE 100 and which underpins all the biggest ETFs around. EDHEC also compares results of other alternative indexing methods (which die-hard cap-weight believers refuse to call indices at all) like Equal-weighting, RAFI Fundamental and Minimum volatility. Here's one of the EDHEC charts for the US market.

1) The good ole cap-weight S&P 500 loses to every other method, not only in terms of raw return but also in various measures to adjust for risk (Sharpe ratio, Sortino ratio, Information ratio, Treynor ratio), just as it did in the model-building time period.
2) The FTSE EDHEC Risk-Efficient Index wins by the most and by a huge amount over the S&P 500.
3) Minimum Volatility is a close second, perhaps even first, given the risk adjustment ratios. Perhaps the new ETFs launched on this basis, which I wrote about in my other blog in Low Volatility ETFs - Promising Safety and Reward, are worthwhile.
4) The Risk-Efficient out-performance is repeated separately in the UK, Eurobloc, Japan and Developed Asia ex Japan. RAFI fares indifferently (oh-oh, for my portfolio!). The other two couldn't be tested.
5) The Risk-Efficient performance is primarily NOT due to exposure to small cap and value factors. It comes from better stock weighting.
6) "... provide some evidence that the performance advantages of efficient indices largely stem from the improved diversification."

So far, I've only been able to find one actual live fund that applies the new Risk Efficient index method, the Parworld Track FTSE EDHEC-Risk Efficient Eurobloc traded in Luxembourg. Expect more to come from the ETF industry.

Is this a real improvement over cap-weighting, or an artifact of data that doesn't go far enough back (only to 1959 for the S&P 500)? Of course, by the time there is enough data to satisfy everyone, we will all be dead.

Tuesday, 24 January 2012

World Economy Trends from McKinsey: Long Slow Recovery in Progress

Consulting firm McKinsey Global Institute's Debt and deleveraging: Uneven progress on the path to growth tells us that the recovery from the global credit crisis, three years later, has only just begun and will still take many years to complete. That's the bad news. The good news is that this is in line with past similar crises.

Canada used to be so much better off than the USA in terms of total debt but now things are fairly equal as Canadians have added debt while Americans have shed it. Amongst major economies, the USA is going fastest in the right direction according to McKinsey. Breaking the debt down by sector, another chart (Exhibit E4) shows that Canadian financial institutions have considerably more debt proportionally than those in the USA.

Exhibit A4, copied below from the long version of the report, shows that counting unfunded US government pension and health benefits for retirees pushes the US debt burden up to 140% of GDP. That still leaves it no worse in total than countries like Spain and France. The two countries by far in the worst overall debt shape, both of which have not even started deleveraging, are Japan and the UK, yet their borrowing costs are not at crisis levels. Huh?

Takeaways for investors: 1) Canadians should not be smug and should not count out the USA (you don't get to be number 1 for no reason); 2) Expect 3-4 years more of uneven weak economic times before things get much better though the "getting worse" phase seems to be finished; 3) Opportunities will arise for companies in infrastructure and public sector projects since governments won't be able to add more debt to build them; 4) Consumer demand won't be strong.

Monday, 23 January 2012

Penalties on Securities Lawbreakers - a Fine Mess

Last week the Ontario Securities Commission revealed its poor record of collecting fines it imposed on those it found guilty of violating securities laws since 2005 - collecting only about half of total amounts owed, almost all of which came from negotiated settlements (with mainly major financial companies who always pay up) and virtually none of which came from contested hearings, where the most egregious fraudsters get sanctioned.

Though I suppose we should be a little grateful that the OSC is even revealing its performance - a new departure and a good step - and that improvement seems to be the OSC's goal, a brief analysis of the numbers in the Globe and Mail by law reporter Jeff Gray shows that the effort is a long way from anything that could be considered acceptable performance.

The Globe quotes the OSC director of enforcement on how tough the collection job is. Out in Alberta the ASC gives the same "we're doing all we can" explanation / excuse about its dismal record of not collecting fines.

Well, that's not good enough. They say they want to improve. Perhaps they could start with The Collection Gap's lengthy examination of the collection issue in the USA, where they have the same poor performance problem. The multitude of reasons advanced (including those of OSC and ASC) to explain woeful collection of fines, like individual incentives, institutional incentives, regulatory capture and insufficient resources, are reviewed and evaluated. The authors conclude that the fine collection impediments are mainly within the control of the agencies, not beyond their control (as the OSC seems to claim). Though the report is about the USA, the situation sounds a lot like Canada. (Thanks to Ken Kivenko of for the link to this document.)

For more tips on how to collect, they might want to consult Canada's "Collections R Us" aka Canada Revenue Agency. CRA's tax debt (taxes not paid on time) was only about 5.5% of total collections back in 2005 when the Auditor General last looked.

If there were a national securities regulator, whose terms of reference included a stronger mandate, incentives and mechanisms for enforcement and collection than provincial regulators evidently now have, greater cooperation with the CRA might also be possible. The CRA should be very interested. After all, income from investment fraud and illegal gains are subject to income tax too as noted at IncomeTaxCanada by Jim Maroney.

Tuesday, 17 January 2012

Bloggers for Charity Guest Post: Walking to End Women’s Cancer

It's the Bloggers for Charity guest post day! Blog readers will recall, and will certainly notice if they read other Canadian financial blogs, that today is the day for the publication of the guest posts for bidders with the winning donation to a charity of their choice. Kudos again to blogger Mark Goodfield of the Blunt Bean Counter for coming up with the idea and getting it organised. The winning bidder here came up with $200 and here is her post.


Why do I walk in the Walk to End Women’s Cancer?

By Jamie Woodyatt

The Weekend to End Women’s Cancers ( walk, this year taking place September 8-9, 2012, came to Toronto 10 years ago with a goal to raise funds for research and treatments for women facing Breast Cancer. The funds are distributed locally so that it benefits the women where the “walks” take place. In Toronto the funds go to Princess Margaret Hospital. Participating in the event is a true commitment; each walker must generate a minimum of $2,000 in donations for the privilege of walking 60km over 2 days. The bonds formed during the ‘walk’ between walkers, volunteers, survivors, team mates, crew, is amazing as thousands of people join together for their individual reasons for a common goal TO WIN THE WAR AGAINST WOMEN’S CANCERS – NOW!!!.

Some of my inspiration… My aunt is very socially aware and has many causes that she raises funds for and she has walked in the 60km Princess Margaret 8 times. She also took on the 60 km walk in each Canadian city that holds a 60km walk in 2009 (that would be 7 cities). That means that she has walked over 800 km to raise funds and awareness. She also sponsors and participates in the Make a Wish ( tournament each summer. She throws a Christmas bash each year for her friends, family and work associates where guests bring gifts/donations to Nelly’s ( a charity that offers shelter to women and children leaving violence. She walks for her Mom who lost her battle with breast cancer before I was born and she walks as a survivor as she battled breast cancer herself. She is definitely an inspiration and a role-model which pushes me to be a better person.

In 2010 both my Grandfather and my Mom were diagnosed with cancer. I felt blind-sided I needed to do something, so I joined my Aunt's team and walked for the first time in September 2010. It was incredible; the people you meet and the families who contribute. The support is unbelievable; I HAD to walk again the following year.

My Aunt no longer does the walk herself so she has “passed the torch” so to speak. So In 2011 I started both days walking alone; I met fantastic people along the way and made new friends on both days. On 'day one' I met a walker who had lost his younger sister to cancer the year before; she was only 7 years old. On ‘day two’ I met a woman my age that hadn’t lost anyone to cancer but believed in the cause. I was inspired by her most of all, her intentions were entirely self-less and it was her 3rd year to make the commitment!! Since I had walked the previous year too I know from experience its no ‘walk in the park’… although we do walk through some of the most beautiful parks in Toronto!

I would like to give a special Thank You to the people that continually support the walkers; Their families, those that make donations, the volunteers, the crews, the bikers that stop traffic and keep us safe, the people that honk and boost morale, the people that hand out beer and champagne (definitely helps!), the older lady that made home-made pizza and treats (delicious, I wish you were my grandma!), the guys that set up the mist tents outside their houses (AMAZING! Nothing is more refreshing during a hot walk than a mist BLAST), All the little girls who hand out pink lemonade (SO CUTE!) And the list goes on…. You guys make the walk fun and add so much to the roller coaster of emotion we feel!

I walk so there WILL be a cure in my lifetime. I can’t imagine a world without my Aunt or my Mom. With my family’s history I am at risk too. I am a single Mother and the love of my life is Nathan my wonderful rough and tumble 3 year old that I would do anything for. I not only walk for my survivors but for the next generation too.

I am proud to say I will be walking another 60K this year. With over 120 million dollars raised, The Princess Margaret Weekend to End Women Cancers is making a difference, and is a cause I am proud to be a part of. Aside from my son’s birth, it is the most exhilarating experience of my life and will continue to walk for years to come!

If you wish to help me this year I have attached my link - I hope that everyone that reads this realizes that giving your time and effort to a greater good is a heady experience and I recommend it highly; nothing makes you feel better than helping.


To which I, your regular blogger here, would add this. This guest post could not be more appropriate for my blog. It's perhaps fate, or maybe just a reflection of the prevalence of breast cancer (talk to anyone you know, it is pretty sure that a close friend or family member has had the disease), that this post concerns the disease that stole away my first wife eleven and a half years ago. Support this cause, support Jamie. The link above to donate works great, as I can say from having used it myself. Good luck, Jamie!!

Wednesday, 11 January 2012

BlackRock Purchase of Claymore ETFs - Do the Smart Thing Please!

Today's announcement that BlackRock will acquire Canadian ETF provider Claymore could be a good thing for BlackRock and for ETF investors, if some smart, and not dumb changes, ensue.

Claymore charges quite high MERs - about 0.5 % too high - for its ETFs in comparison to those of BMO Financial, iShares and Vanguard. The takeover is a great opportunity for BlackRock, which already owns iShares in Canada, to lower the Claymore MERs and bring them in line. This will attract more investors and not cannibalize its iShares ETFS. In the USA, similar fundamental RAFI-based ETFs (e.g. Invesco Powershares US broad market equity fund trading under symbol PRF) have expense ratios about 0.3% lower than Claymore's, though even that is too high.

Why would BlackRock not lose by lowering fees? Claymore's ETFs are considered to be actively managed (though I do not agree with this characterization, that's the dominant public perception), more an alternative to actively managed mutual funds than to traditional passive market-cap weighted index ETFs. Let BlackRock take on the mutual fund industry with a much more compelling price proposition. After all, Claymore's ETFs already have most of the attractive features of mutual funds - auto & free DRIP and Systematic Withdrawal, Pre-authorized chequing purchases.

The dumb strategy would be to leave Claymore as is, with continued stagnation, or to raise fees, a recipe for investor flight. Claymore's ETFs are being left in the dust. For instance, the flagship Canadian equity fund Canadian Fundamental Index ETF (CRQ) has only $218 million in assets despite being started 3 years before BMO's Dow Jones Canada Titans 60 Index ETF (ZCN), which has $604 million in assets.

Tuesday, 10 January 2012

Book Review: Uncontrolled Risk by Mark T. Williams

"Occupy" protesters would benefit from reading this book. Instead of the mindless directionless opposition to everything capitalistic they would know a lot better who and what to blame for the narrowly averted collapse of the world's financial system in 2008. Better, they would know the kinds of reforms and controls that need to be implemented to make the system operate with more stability to avoid a future recurrence.

In fact, every shareholder and voter needs to know this stuff too. After all, when things go wrong with the financial system, we all get a rather severe smack as a result. The scary fact of the matter is that the conditions that allowed the crisis to build up, the way the system works, have not substantially changed.

Williams informs us by telling the story of the rise and fall of investment banker Lehman Brothers. The story method is very effective in showing how the situation built up over decades as the people, the company, the industry, the regulatory bodies, the political scene all evolved to the 2008 climax of Lehman's collapse and the ensuing beginnings of financial Armageddon. Along the way the author introduces and explains in terms the layman can understand what might be called the technical stuff, the financial products and structures like CDO, MBS, CDS that ended up being the bombs that blew things apart.

We learn that it wasn't just the "greedy bankers" at fault. Things are not that simple in the real world. Williams takes a whole 25 page chapter to list the bad guys and institutions and summarize to what degree they did wrong, everyone from Dick Fuld, Lehman CEO and other key Lehman players, Boards of Directors, the US Congress and several Committees, the Federal Reserve, the SEC, the media, academics, accounting firms, credit rating agencies, lobbyists, the FASB, US Treasury Secretary and former Goldman Sachs CEO Hank Paulson and last but not least consumers who binged on debt and housing.

Apparently, the bankers (and others) weren't simply greedy, they were also stupid and did not truly understand the risks being taken. Prior incidents that should have been learning and warning signs, like survival and recovery from the 1998 LTCM fiasco, instead made people over-confident. Risk models used by industry that work well most of the time failed utterly in times of extreme stress when they would be most useful.

Williams sticks to the facts in the book but it would have been fascinating to get more into the psychology of the players to see what was the mix of flaws and vices. The 2008 crisis could provide valuable insight into how the thinking of institutions and societies go wrong.

The last chapter contains Williams' ten point plan for changes to reduce chances of a new financial systemic risk event. Some can easily form the basis of policy lobbying and legislation - things like mandating higher capital levels, imposing leverage constraints, creating a systemic risk regulator. Others can lie with investors - things like requiring greater executive accountability, improving Board oversight, creating smarter compensation schemes. (In the case of this latter set of changes, I am left wondering how this jives with passive index investing where investors are distant, ignorant and often uninterested in the individual companies like Lehman where dominant managers held sway and escaped control with destructive results. It's another reason I like the idea of pension savings being managed by a body like CPPIB with the motivation, resources and power to kick butt in corporate governance.)

The book and its story unfortunately contents itself, except very peripherally, with happenings in the United States. The reader therefore does not get to see how the worldwide systemic contagion occurred, or how events and conditions elsewhere exacerbated the problem.

Favorite Quotes and Notes:
  • "... the U.S. government has failed to find the perfect balance between excessive regulation - viewed as stifling to bank profitability and economic growth - and lax regulation and oversight - viewed as a recipe for financial and economic instability" - which I find to be a far more balanced and rational worldview than the strident "capitalist system is rotten" view of some people
  • "Companies that take no risk go out of business just as easily as those that take too much risk."
  • in 2006, Lehman's Chief Risk Officer Madelyn Antoncic received an industry award for best risk manager of the the year; a year later Fuld/Lehman removed her from the job and demoted her; i.e. the elaborate risk management structure at Lehman was just a facade to fool credit rating agencies into giving Lehman a lower cost of borrowing/capital to increase profits.
  • Value at Risk (VaR) the commonly used industry measure of risk is described by a Lehman shortseller in a quotation as "an airbag that works all the time, except when you have a car accident"
  • the boyhood home of Fed Reserve chairman Ben Bernanke, since then sold on to several others, was subject to a sub-prime mortgage loan foreclosure - how symbolic!
  • "Post-credit crisis, executives from TARP-taking banks continue to express public support for re-regulation of the financial markets while their paid lobbyists attempt to defeat or weaken any new regulations."
  • Canada is cited by Williams as a model to emulate, praising the consistently strict oversight and regulation here
For the individual investor, the important lesson is first, that the financial system and consequently investment markets, are still very exposed and subject to severe shocks and second, that risk assessment and management are essential never-ending tasks.We need to be ever aware and wary of what is going on. Since some risks are not controllable or often not knowable by the individual, the idea of diversification, spreading investments, gains reinforcement.

A quick 220-page read, it is well foot-noted and indexed. The writing flows smoothly too. Don't be surprised if you come out of reading it a bit angry and less confident in the capabilities of business and political leaders.

My rating: Though missing the greed vs stupidity assessment and the international linkages, it is excellent on what it does present - 4 out of 5 stars. Definitely worth reading.

Thanks to publisher McGraw-Hill for providing a review copy. The book comes in Adobe's eBook format (see McGraw-Hill site)as well as paper.

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